A Roth IRA is a tax-favored account that allows anyone -regardless of age-
with earned income to contribute up to $6000 annually ($7000.00 if age 50 or older).
If you have a spouse and your joint income is within the allowable range, you can open
separate Roth IRAs and contribute up to $6000 each ($7000.00 each if you are both age 50 or older),
even if your spouse has no earned income. (However, your combined earned income must be at least $11,000
or $13,000 if you are both age 50 or older.)
The maximum Roth IRA contribution is phased out for those with adjusted gross income between $122,000 - $137,000
(single) and $193,000 - $203,000 (joint), or $10,000.00 for a married individual filing a separate return. Contributions
are not tax-deductible, but can be withdrawn tax-free at any time. Earnings grow tax-deferred and can be withdrawn tax-free
if your account has been open at least 5 years, and if you are over age 59-1/2, disabled, or using up to $10,000 to buy a
first home. Earnings which are withdrawn without meeting these qualifications are subject to income tax and a 10% penalty.
||Traditional IRA contribution maximums for tax year 2019 are the same as the Roth IRA, however, there is no income limit unless the individual is contributing to an employer-sponsored retirement plan.
Traditional IRA deduction phaseouts for contributing to an employer-sponsored retirement plan are:
- Single $64,000 - $74,000
- Married filing jointly $103,000 - $123,000
- Married filing separately $0 - $10,000
- Spousal IRA $193,000 - $203,000